Struggling retailer trapped in yet another controversy | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Retail sales have been sluggish since the pandemic. And there’s a reason for that.

Inflation started creeping upward in 2021 when consumers took advantage of their government stimulus checks by going on spending sprees. That was a good thing for retailers at the time, but it led to unfortunate consequences.

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Just as consumers’ appetite for discretionary spending increased, supply chains found themselves bottlenecked. That led to an excessive amount of consumer demand, which drove prices upward.

And things haven’t fully settled down since.

Inflation hasn’t been as rampant these past couple of years as it was in 2022 and 2023. Back then, the Fed was so spooked it went on a rate-hiking rampage.

But inflation is still a problem for consumers. And because of that, they’re spending their money a lot less freely.

That’s had a huge impact on retailers’ bottom lines. And in the past couple of years, a number of major retailers have either filed for bankruptcy or closed stores in the wake of poor sales numbers.

A struggling retailer is trapped in yet another controversy.

Image source&colon; Getty Images

Kohl’s has struggled immensely

While the post-pandemic period has been tough for retailers on a whole, it can be argued that Kohl’s has had a particularly unfavorable run.

Part of the reason may stem from a long-standing strategy of Kohl’s to physically distance itself from competing retailers.

Many department stores serve as mall anchors. Kohl’s tends to operate more standalone stores.

That strategy has been a double-edged sword.

On the one hand, distancing itself from the competition means Kohl’s can potentially command more dollars per shopper walking in the door.

On the other hand, because Kohl’s is not a mall-based retailer, customers have to actively want to shop there. They’re not going to randomly stumble upon a Kohl’s unless they’re heading to pick up groceries or dry cleaning and there happens to be a Kohl’s in their line of sight.

Not shockingly, Kohl’s has experienced a steep decline in sales, to the point where it’s already shuttered more than two dozen stores this year. And if things don’t improve, more Kohl’s store closures could be coming.

Kohl’s can’t seem to shake controversy

At the start of May, Kohl’s was forced to fire its CEO, Ashley Buchanan, over unethical behavior related to a conflict of interest. Buchanan had served in the role for less than five years prior to his dismissal.

Now, an SEC filing reveals that Kohl’s board member Christine Day’s recent resignation came as a result of disagreements with the company, contradicting a previous statement.

“There is simply no way the Board could have interpreted my resignation as having no conflict issues. This was a deliberately selective edit,” Day wrote in an email.

Day, who’s the former CEO of Lululemon, had been on the board of Kohl’s since 2021 and was involved in committees centered on finance, audit, and compensation.

Day says she voiced concerns over how the company handled a report by proxy advisory firm Institutional Shareholder Services over executive pay.

While Day’s departure may not have a huge impact on the company’s operations or strategy, it’s yet another blow for Kohl’s at a time when it doesn’t need more bad press.

More Retail:

Kohl’s is in the midst of one of its roughest patches on record, with sales falling 9.4% year over year during its most recent fiscal quarter.

The company announced plans earlier this year to slash 10% of its corporate workforce. It also pulled the plug on Amazon returns in a number of store locations, raising questions about the program’s intended effect of driving foot traffic.